Case Studies

Case Holder:
Sivalinganathan Thabesan

Local Epowerment through Economic Development

Economic Sector based, partnership development and inclusive Approach

Promotion of Youth Employment in Fragile Settings

Background & Context

The Local Empowerment through Economic Development (LEED) Project was implemented in the complex setting of post-conflict Northern Sri Lanka. The case study explains the background to the project and how it developed an appropriate implementation strategy (or strategies) for addressing the initial challenges that faced the project at its start-up in 2011 and examines how these were continuously adapted and implemented in response to the rapidly-changing and complex local and national environment, while ensuring the primacy of ILO’S core values of social justice, dialogue and its key concerns of equity, decent work and empowerment.

In May 2009 the Sri Lanka Defence Forces defeated the Liberation Tigers of Tamil Elam, (LTTE) and thus ended the 30-year civil war. At the end of the conflict the Northern Province was faced with a situation in which the entire civilian population* had been displaced and interned in a displaced persons camp in Southern Vavuniya. There were also less severe population displacements in the surrounding districts. This was an acute humanitarian challenge that was largely addressed by the efforts of international agencies, NGOs and the Government of Sri Lanka (GoSL) which provided all basic needs such as food, water, medical and educational services to the displaced persons.

The Problem

The Project commenced operations in the Northern Province in January 2011 in the Districts of Vavuniya, Mullaitivu and Kilinochchi, which were the most recent and heavily conflict-affected areas of the Northern Province. This was a period of high levels of government investment and intense activity by Government, UN agencies and NGOs in addressing the challenges facing a devastated post-conflict Northern Province. Poverty was evident and widespread. Communities were disempowered and traumatized and the private sector was reluctant to invest in rebuilding businesses. At a national and more strategic level the northern economy and its agricultural marketing system was destroyed and the re-building process had not yet begun.

The rapid improvement in infrastructure and communications was opening up the North to the more developed agro-business sector in the South which had the potential for making a very positive impact, but if not managed properly it also had the potential to perpetuate the perceptions of inequality between North and South.

There were still what could be considered as a wide range of “humanitarian needs” to be addressed. There was also a multiplicity of actors, agencies, NGOs and local organizations involved in some way or another in supporting the resettlement process and fulfilling those needs. However an examination of the situation revealed that all manufactured goods, processed food, even rice that was being delivered, and all building materials for housing were being sourced from outside the province. In addition, agricultural producers were, on account of the lack of “fair markets”, selling crops at less than the cost of production. This was resulting in a net loss of revenues and lost opportunities for creating jobs or supporting local enterprises in the province.

It was a complex situation that required a different approach to the humanitarian assistance and livelihood aid delivery paradigm that prevailed at that time, in order that more strategic issues of long-term equitable development and peace-building could be supported.

Objective

The primary objective of the project is to create employment and increased income for the most vulnerable and poor people in the post-conflict-affected areas in the Northern Province. The project also influenced development of the capacity (systems, organizational and individual) of local business development services, training providers and local government to facilitate the development and growth of enterprises with a focus on the special needs of women and youth entrepreneurs.

Value Proposition & Activities

The approach evolved almost organically over the first six months of project operations as our experience on the ground grew and our understanding deepened. It was pragmatic, conflict-sensitive, and ultimately aimed at empowering local communities, producers and their organizations so that they would be in a position to participate with some degree of equality in the post-conflict economy and markets that were emerging.

It is important to understand that, while this general strategy and project philosophy remained constant during the five years of operation, the ways in which it was pursued, and the methodologies, tools and tactics used, were adapted to take account of the changing environment, the new challenges, and the progress made by the project in achieving its objectives. The key features included; Local Ownership and Accountability and engagement with the Government. The project management took a decision to engage proactively with government at national, district and divisional levels so as to develop a dialogue of mutual respect and understanding and avoid the atmosphere of suspicion that prevailed at that time between the Government of Sri Lanka (GoSL) and the UN and NGOs. At a local and technical level this involved providing support to a number of under-resourced departments to enable them to provide technical and advisory services. This also provided the space for them to assume a more executive role in implementation of future project activities and increased their capacity to coordinate the activities of others in their areas of concern.

Active Partnership between Community and Project

At the community level a type of “community contracting” or “delegated procurement” contracting approach to project implementation was adopted. This methodology involved the contracting of beneficiaries for the procurement of infrastructure, equipment and services by transferring the necessary funds for them to manage. This was a radical change in the way external agencies had engaged with local communities up until then. It changed the prevailing paradigm of passive beneficiaries and a paternalistic implementing agency to one of active partnership.

Focusing on Sustainability

The project adopted the position that sustainable improvement in the lives of the poor and vulnerable groups can only be achieved by ensuring their beneficial inclusion and integration in an expanding and growing economy. Initiatives to improve the economic wellbeing and lives of vulnerable groups needed to be creative, innovative even positively discriminatory but they must ultimately also be designed and implemented with the same degree of critical economic analysis and consideration as a commercial intervention, so as to ensure sustainability.

Engagement with the Private Sector

Drawing on experience from other post-conflict environments, the project was aware of the critical importance of the private sector and also cognisant of the risk to long-term peace if the capacity gaps and power relations between the well-developed Southern private sector and under-developed primary producers was not factored into efforts to create new markets. The tripartite nature of the ILO and the relationship with the Employers Federation of Ceylon provided entry points and useful contacts. Although this engagement with the private sector commenced at an informal level it developed into national-level collaboration with the EFC and The National Chamber of Exporters that has now evolved into numerous partnerships that have been, and continue to be, instrumental in creating jobs and decent incomes for thousands of families in the Northern Province. While addressing the immediate needs of decent work and livelihoods at grassroots level it has also addressed the less tangible but more strategic goal of the North-South development gap and the perception of inequality between the two main communities that was often at the heart of the 30-year conflict.

This is a geographically-based tool that provides an overview and informs the project on important social, political and economic issues in a specific geographical area. It is basically a SWOT analysis of a specific area and is particularly useful in post-conflict situations.

In the case of Sri Lanka it has helped identify the most important economic sectors or sub-sectors. It has identified the main actors, their roles and relationships, how they interact, vested interests, potential opportunities and threats, and generally provided an overview of the social, political and economic dynamics in the area.

Sector Studies

This involved a review and assessment of the conditions and potential opportunities of a given sector or sub-sector of the local economy as identified in the initial TDIM studies. It examines the sector on a national and global basis to determine which sectors have growth potential and how investments by the project locally may perform in terms of growth, livelihoods and employment. Changes in world demand, government policy, new technology can make traditional products or industries obsolete or help identify new opportunities.

Value Chain Analysis

A value chain is defined as the full range of activities that businesses and producers go through to bring a product or service to their customers. There are numerous publications describing value chain studies and value chain development to which reference can be made. For the project team it was important that these were carried out through an “ILO lens” that examined not only issues of production and markets but also the power dynamics, the roles of different groups, the role of women, and vested interests within any one chain. As with the sector studies this is particularly important in a post-conflict setting in which there is always a danger that initiatives may reinforce existing inequalities and unequal power structures or create new inequalities and imbalances.

Learning & Results

The project is considered to have been successful on a number of levels. At a national level it has built awareness of the north-south development gap and created structures and avenues through which responsible investment partnerships can be created between the private sector and primary producer communities.

The project mainly extended its technical support to revitalization of the cooperative societies by reorganizing their membership and core functions. As a next step the members were linked to the growing, production and processing of various crops, and then – once a regular supply was in place – sustainable market linkages were established, first with local buyers and then with a number of exporters. A great deal of training and capacity-building took place throughout the process so as to empower the communities.

As a result of the interventions the project has been able to support more than 100,000 families with various income-generating and employment-related opportunities. Based on the information available, the project has overall been able to support more than 35,000 individuals in gaining direct employment and developing self-employment activities. As a result of these interventions, individuals who had no access to such income-generating opportunities prior to the project are now in a better position to invest in improved housing and give their children a better education and improved access to better health facilities and improved lifestyles.

Conclusion & any future variation

The LEED project has been able to record a high level of success at the level of individual empowerment (including members of Co-operatives and indirect beneficiaries) as well as at the agency level through the Co-operatives. An empowered and capacitated Co-operative promoted by the LEED functions as a foundation for continuing the economic activities that will further benefit the members of the Co operatives and communities.

The interventions of the LEED have extended beyond the confines of individual and agency empowerment. The LEED project has recognized the importance of having a conducive policy and institutional and legal framework for the sectors it has promoted. The Fishery Improvement Plan and the Statutes to amend the Co operatives Act in order to ensure that Co-operative laws are business-friendly are some such examples. These interventions facilitated by the LEED, through mobilization of expertise at global levels, show signs of making an impact at a broader institutional level which was not anticipated in the project design.

Apart from economic empowerment that has taken place at individual and agency levels, the LEED project has created business linkages between the North and South which had to a great extent been severed by the war for nearly thirty years. These business linkages are evident at different points in the value chain.

Many externally-driven post-war interventions in the North have proved to be less successful, unsustainable and dependent on the donor. The ILO’s choice of its counterparts was Co-operatives which are locally-based entities that had been tried and tested in the North. However, it required time and patience to work with Co operatives that have their own bye-laws. Hence many aid agencies have not opted to collaborate with Co-operatives, as expounded in the section on attribution. Co operatives, being a credible and firmly-rooted organization in the North, have ensured that the LEED’s interventions are durable, sustainable and locally-owned.